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Offshore - don't pay tax twice.

Offshore bonds allow higher rate taxpayers to defer tax on their investments until such time in the future when they might be paying income tax at a lower rate.

The facts are that in 1971 the top rate of income tax on earned income was cut to 75%. A surcharge of 15% kept the top rate on investment income at 90%. With little relief when In 1974 the cut was partly reversed and the top rate on earned income was raised to 83%. With the investment income surcharge, this raised the top rate on investment income to 98% and an additional tax called an investment income surcharge. Currently, you only need to look at the higher rate of income tax at the moment, the political debate rages on.

Taxation in the current economic climate could increase, remembering taxation at over 80%. Currently, this additional form of taxation does not apply but with increasing pressure to raise taxation in certain situations Offshore Products could be considered when looking at the advantages of a ‘gross roll-up’ facility. There are tremendous tax benefits of either investing onshore or offshore.  Funds divided tax efficiently between spouses, children and civil partners, to utilise all their unused personal allowances is an ideal way to mitigate and potentially reduce the future rates of income, IHT and capital gains tax suffered.  

The advantages of investing offshore include:

·     Funds can be brought back to the UK at a time that is the most suitable to the client when there is a more favourable tax regime.

·     Gross roll up facility enabling tax-efficient portfolio construction, with the facility to make cost-effective fund switches without the 30-day rule and without creating Capital Gains Tax.  In addition, incorporating currencies, international dividends utilising the tax efficient 5% rule for income, very useful for higher rate taxpayers.

·     Your funds can be assigned under trust to your spouse or children and the relevant taxation is based on their tax position at the time of encashment.  As an example, if your spouse or children are non-tax payers or basic tax payers at the time.

·     Utilising of your Nil Rate Band (NRB) currently set at £325,000 each (2017/8) in respect of IHT mitigation ensuring that for a married couple £650,000 is outside of your estate, together with the appropriate trust planning.

·     Tax efficient for School fees planning and on children's investments.

We are independent whole of market advisers and free from all kinds of influence; not bound by any kind of agreement with any product provider, 25 years’ experience incorporating the many advantages of letting go traditional biases investing in both onshore and offshore global funds incorporating tax planning advice and benefits, working in conjunction with your solicitors and accountants on this subject is of paramount importance when considering onshore or offshore funds.

We welcome clients who want to be informed and we are confident about the quality of our independent, free from any restrictions advice. To back this up, give you peace of mind, we can organise for new clients to speak to any of our clients at random direct to confirm these facts. We are happy to arrange a meeting without any obligation, on both parties.

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Membership of the:

    CISI

Chartered Institute for Securities and Investment
Chartered Insurance Institute
The Personal Finance Society
The Royal Statistical Society

We are authorised and regulated by the Financial Conduct Authority. Our regulated activities comprise advising on and arranging investments. Our Financial Services Register number is 583160. You can check this on the FCA Register by visiting their website at www.fsa.gov.uk/register/home.do